Higher Sales tax in Illinois (USA) for online sellers

As of January 1, 2021, a series of structural changes to the Illinois sales tax laws came into force. Due to the amendments to the Retailers’ Occupation Tax (ROT) and the Leveling the Playing Field for Illinois Retail Act, “remote retailers” are required to remit state and local retailers’ occupation taxes.

As the Act name makes it obvious, the changes look to “level the playing field” between Illinois-based retailers and remote retailers by imposing State and local retailers’ occupation taxes on Illinois retailers and remote retailers alike. Marketplaces Facilitators are also included in these changes and are required to remit Sales tax and local ROT on behalf of sellers.

In general, and according to the new rules, all online sellers and Marketplaces Facilitators who exceed the Economic Nexus threshold (USD 100k annual gross sales or 200 separate transactions to IL purchasers) are required to collect and remit both Sales tax and local retailers’ occupation taxes. This of course will have a direct impact on final retail prices, which would see themselves increased in 2021.

Although consumers will likely pay more for the goods they buy online, this rule benefits local Illinois brick-and-mortar retailers who will see their condition leveled toward online sellers.

If your business is looking to expand into the US market, GVC can make sure you comply with Sales and Use tax filing across the US. Do not hesitate to contact us for more information on our coverage in the US and the rest of the world.

Source
www2.illinois.gov